Report: Canada Can Benefit from Marine Use of LNG

A report released on Wednesday highlights the benefits of using liquefied natural gas (LNG) as an affordable, lower emission fuel for Canada’s marine sector. According to the report, Liquefied Natural Gas: A Marine Fuel for Canada’s West Coast, all of the technologies needed to use LNG as a marine fuel are proven and commercially available.

“Canada has a tremendous natural gas resource advantage,” said Alicia Milner, President of the Canadian Natural Gas Vehicle Alliance and Chair of the project steering committee. “Allowing access for LNG in the marine sector is smart and strategic for Canada. British Columbia is uniquely positioned to become a preferred North American destination for LNG bunkering, with Port Metro Vancouver well- suited to be a leader in this regard.”

In the near-term, coastal vessel operators have the best opportunity to benefit from LNG. For six coastal vessels analyzed, fuel costs were reduced by more than 50% with five of the ships having a payback on initial investment of less than six years.

The marine sector can also serve as an important new market for British Columbia’s extensive natural gas resources. Under a “medium” LNG adoption scenario, 150 LNG vessels operating on the West Coast by 2025 would create new demand equal to 8.5% of British Columbia’s 2012 natural gas use.

New marine regulations taking effect in January 2015 require a 90% reduction in fuel sulphur content. Compared to traditional marine fuels, LNG use can reduce sulphur emissions by at least 90%, lower nitrogen oxide emissions by 35% or more, decrease particulate matter by at least 85%, and reduce greenhouse gas emissions by up to 19%.

Jointly funded by Transport Canada and a broad group of industry and other participants, the report recommends changes to Canada’s marine regulatory framework to allow for the review and approval of new LNG projects. These changes would support new projects moving forward including the use of three LNG ferries that BC Ferries plans to have in operation in 2017.